Are Stadium Naming Rights and Sports Adverstising Deals Worth It?

Citi paid something like $300 million for the naming rights of the new Mets stadium, now known as Citi Field. You will find similar deals in every city. But are they worth it? There has been lots of debate. The debate usually comes down to a fundamental debate in marketing. Is brand advertising and spending worth it? Here we are again at the ROI question.

How do you measure the return to your business of naming the Mets stadium for example? You can come up with some metrics such as new accounts, customer loyalty etc in the market, but it is usually and indirect metric, that is, you can't directly attribute the new account to the stadium name but it can be seen as helping.

As budgets get tighter, many companies are looking at their budgets and asking, is brand advertising worth it? After all, it is much easier to measure return on investment (ROI) on a direct mail piece. You know your cost. You know your response. You know your resulting sales.

How can a sponsorship of the Washington Capitals or Seattle Mariners makes sense for a business?

I think it can makes sense, but only if there are several conditions in place:

1) You must be targeting a regional audience. By definition, sports franchises are local enterprises. Yes, there are some that are national or global, but this is the exception and not the rule. And, it will be very difficult to measure any kind of tangible impact for a local sponsorship on a national or global scale. Know your audience and make your decision with the assumption that your impact will be local.

2) You must go for some kind of endorsement or key sponsorship. Advertising during Steelers games can be an effective way to reach a specific demographic, if that is your goal. But if you are seeking to benefit from that demographic's emotional connection to the team, then straight advertising misses a key opportunity.

3) The team or franchise you are sponsoring must have a strong and irrational fan base. Think about it. The Tampa Bay Devil Rays made it to the World Series, but never filled the stadium during the year. The Nationals have a new stadium and lots of attention, but the fans are just learning to love them irrationally. The Nats are not the Redskins. Those fans are truly nuts in love. That is the kind of franchise you would want to be associated with....assuming their fans are the demo you are trying to reach.

4) You must make your brand part of the team's brand family. Red Sox fans know that they are part of something more than following a sports team. They call themselves Red Sox Nation. For many, the Red Sox are part of their own personal brands/identities. With effective sponsorship and advertising deals, you can make your product part of the "family." The key is meaningful placement and enagement as well key endorsement by the organization. Another Red Sox example. Citizens Bank is a corporate sponsor. They have signage. They advertise during broadcasts, but perhaps the most effective part of their plan is when Jerry Remy, the color man for the Sox TV broadcasts, reads promo scripts and often goes off script to say what a great bank they are. You can't pay enough for that kind of promotion. But it comes from being a trusted part of the family. And it is a cycle that perpetuates itself.

5) Develop relevant content -- ideally playing off the fans and their emotional connection directly. Avis does this brilliantly in a recent ad developed for the New York market.



I don't know if the $300 million was worth it. But I can tell you, if it is a flat footed advertising deal that doesn't seek to make Citi part of the Mets organization and its fans identities, it will have been a waste of money.

Here are a few other sources of info:
http://www.nytimes.com/2000/10/29/us/denver-journal-what-s-in-a-stadium-name-tradition-or-money.html

http://www.performanceresearch.com/naming-rights.htm

http://www.ameinfo.com/61816.html

http://www.sportslinkscentral.com/sports_business/sponsorship_research.htm